Many individuals use trusts as a key part of their comprehensive estate plans. In the process of creating a trust, one step is to identify the person whom you would like to appoint as trustee. You also must choose a second person to act as successor trustee, in case the original trustee passes away, becomes incapacitated, or otherwise is unable to serve as trustee. The duties of a trustee are extremely important, in that he or she must safeguard your assets and then oversee the distribution of those assets. The nature and scope of these duties sometimes make choosing a trustee a rather difficult task. However, there are some basic guidelines that you should follow in choosing a trustee and successor trustee for your trust.
First, consider whether you want to designate an adult child or other family member to administer the terms of your trust. The advantage of close family members is that you know them well and they often feel as if they have a responsibility to you to manage the trust appropriately. On the other hand, naming one child as trustee over another child can cause hard feelings between siblings. Likewise, if the trustee is also a beneficiary of the trust, then the trustee may be more likely to put his or her own interests ahead of how you intended the trust to be administered. In many cases, and especially those with a high net worth estate, having a family member serve as trustee may be an unwise decisions, depending on your situation.
Next, if your trust contains substantial and complex assets that need special handling, a professional, such as a trust department of a bank, may be the best person and/or entity to serve as the trustee for your trust. Making daily decisions to both preserve and grow certain kinds of assets, as well as paying bills, filing quarterly or annual accountings, making investments, and managing money, can be too big a responsibility for a family member, who may simply not have the skills or education to properly handle the assets. In a case like this, a professional trustee may be the safest and most efficient way to ensure the appropriate handling of your assets. However, a professional trustee also charges fees for serving as trustee, which can deplete assets,.
In some cases, the solution may be to use both a family member and a professional trustee. For instance, your trusted family member can serve as trustee so long as he or she is able to do so. Once your family member is deceased, incapacitated, or unable to serve as trustee, a successor trustee could be a trust department of a bank or another type of professional trustee. This allows you to choose the person whom you believe is best-suited for the job, as well as ensure that there is a solid back-up plan if the named trustee is unable to serve.
If you want to have a comprehensive plan in place for the future to protect yourself and your family, our Washington estate planning attorneys can guide you through every step of the process. We are here to answer your questions, both now and in the future, about all aspects of the estate planning process, including all types of trusts. At Legacy Law Center, we have represented the interests of countless individuals throughout the estate planning process. Contact our office and set up an appointment with one of our experienced elder law attorneys today.
Comments